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Amcor confident of earnings lift
Amcor confident of earnings lift

Amcor chief executive Ken MacKenzie says he is confident the packaging company can deliver increased earnings this financial year.

Mr MacKenzie said Amcor had made a solid start to the 2012/13 financial year, with volumes remaining resilient and benefits from recent acquisitions and cost cuts beginning to flow through.

"The key message this morning is that we are tracking in line with the expectations outlined at the time of the full-year result in August and there are no changes to the outlook comments," he said in a speech to be delivered to shareholders at Amcor's annual general meeting on Thursday.

Mr MacKenzie said Amcor was interested in pursuing further acquisitions and had developed a priority list.

"We will remain disciplined in how we pursue acquisitions and understand the benefits of patience and not paying too much," he said.

Mr MacKenzie said Amcor's Australasia and packaging distribution divisions had had a slower-than-expected start to the year.

Volumes in Australia had been softer than anticipated, with the strong Australian dollar putting pressure on export sales and imports.

To help offset the effects of the dollar, cost cuts and operation improvements were being made across the division, Mr MacKenzie said.

Earnings from the division were expected to be in-line with last year.

Mr MacKenzie said volumes at Amcor's flexibles business, which makes up about half the group's sales and include food and tobacco packaging products, had remained steady in the first quarter.

He said the division was expected to achieve solid earnings growth this financial year, driven by operating improvements and benefits from recent acquisitions.

Amcor's rigid plastics division, which includes the Alcan packaging business, was also expected to deliver moderately higher earnings.

This was despite subdued economic conditions in North America, where volumes have softened.

In an update on Amcor's new recycled paper machine in Sydney, Mr MacKenzie said it was now producing saleable paper, with production capacity to be ramped up in the coming months.

The machine is expected to deliver cost benefits of $50 million in the next two years and help Amcor deliver new products.